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Can I require customers to sign contracts with binding arbitration clauses in South Dakota? What are the requirements?

Here is your answer to the query:

Yes, you can require customers to sign contracts with binding arbitration clauses in South Dakota. The enforceability of arbitration clauses in written contracts, including labor contracts, is valid, enforceable, and irrevocable in South Dakota, as per SDCL 21-25A-1 [1.1]. However, the arbitration agreement must contain a warning clause in twelve-point boldface type immediately above the space for signature of the parties, stating that the agreement to arbitrate is not a prerequisite to health care or treatment, and that by signing the contract, the parties are agreeing to have any issue of medical malpractice decided by neutral arbitration and giving up their right to a jury or court trial, as per SDCL 21-25B-3 [2.2].

There are no specific requirements for the content of the arbitration clause, but it must be part of a written agreement or contract between the parties, and any provision in a contract restricting a party from enforcing their rights under it by usual legal proceedings in ordinary tribunals, or limiting their time to do so, is void, except for agreements to submit controversies to arbitration, as authorized by the Uniform Arbitration Act, which are valid and enforceable, as per SDCL 53-9-6 [3.1].

If a party refuses to arbitrate, the other party can apply to the court to compel arbitration, and the court shall order the parties to proceed with arbitration, but if the opposing party denies the existence of the agreement to arbitrate, the court shall proceed summarily to the determination of the issue so raised and shall order arbitration if found for the moving party, otherwise, the application shall be denied, as per SDCL 21-25A-5 [1.3].

In summary, you can require customers to sign contracts with binding arbitration clauses in South Dakota, but the arbitration agreement must contain a warning clause, and any provision in a contract restricting a party from enforcing their rights under it by usual legal proceedings in ordinary tribunals, or limiting their time to do so, is void, except for agreements to submit controversies to arbitration, as authorized by the Uniform Arbitration Act.

Source(s):
Jurisdiction

South Dakota